Health Care Reform Does Not Increase Competition

For months we have been fed several mis-truths, myths, and outright lies about health care.   It is certainly worthwhile to evaluate all the individual frauds, but we may be missing the forest for the trees.

The major reform that the President and Congress are proposing is to reduce costs by increasing competition.  Unfortunately, nothing they are planning will increase competition at the point of delivery at all.  In-fact it will diminish it as costs will be even further hidden from actual consumers.

Liberals are stating that the free market has failed to keep costs low.  Our health care industry is nothing close to free market.  In a free market system, the consumer (patients) would evaluate how effective a producer (doctors, hospitals, care facilities) is and measure them against competitors.  As most people under standard insurance plans pay their set co-pay regardless of what the provider actually charges, they have no incentive to shop around based on value and hence, the providers have no market-based incentive to control costs.

Imagine a health care system where we had to decide how to spend our own health care dollars.  Doctors would have to compete on service and price.  They would be forced to find efficiencies within their own offices and hospitals to be able to be competitive in the marketplace.  That is not how it works today – at all.

High-deductible health plans paired with Health Savings Accounts (HSAs) put many health care consumers in the driver’s seat.  Because they are spending real money out of an account that they manage, these consumers tend to shop for their health care services, abuse the system far less, and consider less-expensive drugs and treatments that are as effective.  This kind of health plan is certainly closer to showing how a free market health care system might work.  Unfortunately, not everyone is responsible enough to manage their own health care costs.

In our current system, insurance companies work as an insulator between the consumer and producers.  The providers might perform tests or treatments that are more-expensive because the insurance will pay for them.  If they had to sell the cost to the consumer, the patient might actually push back and ask for alternatives and evaluate them all based on effectiveness and cost.

The reform packages attempt to do this value-based evaluation by setting up 10’s of bureaucracies to evaluate the cost and effectiveness of treatments.  Unfortunately it will work just like insurance.  They will have fee schedules that say that they will pay for those treatments and what they will pay.  The only one making a decision at the point-of-care will be the doctor and if the expensive treatment will get paid for, the doctor could use it.  The patient will pay their co-pay regardless if the most or least expensive treatment is proposed.

If the person making the health care choices (patients) is not making those choices based on cost, there will be no downward pressure on health care costs.  If hospitals and providers knew that patients might choose less-expensive, but effective, institutions, they would be forced to use the most cost-effective solutions, not the solutions they could charge the insurance company the most for.

The health care reforms proposed will hide the costs of care even more.  Smaller co-pays, no maximums, etc.  That money has to come from somewhere.  It will come from the premiums of everyone that is not too poor to pay.  If a government-run plan is added, it will come from taxes as well just like Medicare and Medicaid.  Health care won’t get cheaper this way, it will just be less obvious to us that it’s more expensive.

Other Articles on Health Care Reform:

Health Care Reform Analyzed: The truth about HR3200

Baucus’ Bill Revealed

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Rich Mitchell

Rich Mitchell is the editor-in-chief of Conservative Daily News and the president of Bald Eagle Media, LLC. His posts may contain opinions that are his own and are not necessarily shared by Bald Eagle Media, CDN, staff or .. much of anyone else. Find him on twitter, facebook and

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